A Firm Has Fixed Costs of $2,000

question 22

Multiple Choice

A firm has fixed costs of $2,000. Its short-run production function is y = 4 , where x is the amount of variable factor it uses. The price of the variable factor is $3,000 per unit. Where y is the amount of output, the short-run total cost function is

• A) 5,000y.
• B) 2,000 + 3,000y.
• C) + 3,000.
• D) 2,000 + 187.50y2.
• E) 2,000y + 0.19y2.

---

Definitions:

Profit Margin

A financial performance ratio that calculates the percentage of revenue that exceeds the costs of goods sold, representing the portion of sales that turns into profit.

Investment Turnover

A ratio indicating how efficiently a company generates sales revenue from its investment in assets.

Return on Investment

A measurement of the gain or loss generated on an investment relative to the amount of money invested.

Residual Income

A measure of profit that exceeds the minimum required return on an investment or business venture.